How Does Instagram Make Money, and is It Free?

Last Updated: January 30, 2017 - 6:16 EST

Now that you’ve learned all the basics about what Instagram is and how it works, and have learned about all of the app’s basic functions, you may be wondering if Instagram is going to cost you anything, and how the app generates revenue. In this article, we’ll answer those questions, and give you the information you’re looking for.

Is Instagram free?

Yes, Instagram is free. You don’t have to pay any money to install Instagram, or to use any of the its features. Part of the reason why Instagram is so popular is because it’s free to use. Because Instagram is free to use, there are other ways that Instagram makes money. We’ll tell you more about that below.

You may now be wondering, what all can you do for free on Instagram? Let’s go over all of the features that Instagram gives users for free.

4. Capture, upload, and edit photos/videos and post them to your Instagram profile.

5. Like or comment on other users’ photos and videos.

How does Instagram make money?

Instagram makes the bulk of its money though advertising. You will sometimes see “sponsored” posts on your Instagram feed, even if you aren’t a follower of the company that authored the post. Companies pay to put sponsored posts in Instagram users’ feeds to promote their products or their business in general.

How does Instagram’s advertising work?

Instagram allows brands, businesses, companies, etc. to pay for advertisements within the app. These ads will appear in your Instagram feed along with posts from people you follow. Since Instagram has over 500 million users, it’s a great platform for businesses to advertise on if they want to gain exposure.

At one time, Instagram’s terms of service were changed to imply they could sell users’ posts to advertisers as they saw fit – without compensating them. Many people were not happy with that decision, and complained. Instagram has since removed that policy, and reassured Instagram users that they retain the rights to their content.

“Instagram does not claim ownership of any Content that you post on or through the Service. Instead, you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, subject to the Service’s Privacy Policy…”

Okay, so Instagram can’t do anything with your information outside of what its Privacy Policy states. So, then, what does its privacy policy say? Here’s what Instagram says they can (or can’t) do with your information:

They won’t sell your information to other companies.

They might share some of your information with companies that are legally affiliated with Instagram (i.e. their parent company, Facebook), but they will honor your choice if you decide to make your Instagram posts private.

They may share some information with advertisers so they can show you more advertisements that actually pertain to/interest you.

They may only share parts of your information that are anonymous, so that it does not link back to you

So, in a nutshell, Instagram won’t sell any information to advertisers that could personally identify you on its own. However, they may sell anonymous information about how you use the website, such as who you follow or comment on, or where you access Instagram from. Advertisers may use this information to display advertisements to you on Instagram that will, in theory, correspond to your location or interests.

That’s it for this article about how Instagram makes money. If you haven’t already, be sure to check out the rest of our Instagram course! We’ll teach you about what Instagram is and how it works, how to use various features of the app, and more. If you’d like to try out another app like Instagram, check out our recommended alternatives to Instagram here.